Going into the repo business will vary from state to state as far as licensing, insurance and bonding goes. However I will give you a run down of how much it may take to open a repossession business in Florida for starters. Another thing to understand is the repo business varies greatly depending on your specialization, depending on your tools, depending on your office or lot size and the list continues on.
I have opened and worked in all of the repossession industries based in Florida and give you several typical costs to open a repo company in each field. To start with lets go with a small time car repossession business.
When I first started doing cars in Florida, I was already becoming an expert in vessel repossessions world wide so for me personally I did not need to purchase a repo truck. Not purchasing a repo truck or a truck that could do repossessions in any way, in fact I didn’t even purchase a truck period. My offset was always having an assistant with me. if I had no assistant, I would simply call a tow company to assist me in transporting the vehicle.
I rarely had to call a tow company to help me as I always typically had keys. If the car was high end like a Lamborghini in another state or a tougher job and the finance company was willing to pay, I would actually make the keys prior to flying out and completing the repo which I will get into later how to repossess in other states. It really is a business of organizing everything and planning, unless it is just a “the car is here at this address, no keys go and pick it up with the truck” type deal. You really have to be on the ball and plan out each and every case. You have to think about all the things that can and will go wrong, think about your safety and always remember to avoid confrontation.
In Florida I had to get an E license for a repossession agent which costs are listed here. Then I had to get an R License which is a recovery agency license that costs
- Application fee $50.00
- Finger print processing fee is $42.00
- License fee is $450.00
- Total just for license $542.00
Remember there are more requirements that must be paid for, such as office to hold license is a requirement. Cannot perform repossessions from a house location.
I had an office but I did not have a lot to store vehicles, so since my clients were local by here pay here lots, they would give me the keys to the gate to drop off vehicles each time. This also kept my expenses down.
Insurance for Repossession agents in Florida
Several years ago, strangely enough the State of Florida decided to waive the insurance requirements for recovery agencies. However, without insurance don’t even try to get a bank or finance company to use your services, it will not happen. You may however be able to get smaller car lots to give you the jobs anyways, they may not even ask to see it, but rest assured any legit finance company will ask for Insurance and a large bond. I would absolutely consider getting both and making them an expense of your operating costs.
Our insurance was much more expensive as we repossessed high dollar vessels and aircraft so we never had an issue. I would venture to guess a small liability policy will run a couple grand a year, with trucks probably slightly more. Please check with one of our sponsors as to the coverage costs.
All in all, to start out it doesn’t have to break the bank, however in Florida you must go through all the steps to get to that level which can be time consuming. Always good to learn for a while first in an industry like this.